Court told that Nama adviser owes €69m

A DUBLIN solicitor whose firm advises Nama is, with his wife, being pursued by Bank of Ireland in the Commercial Court for some €69.5 million over unpaid property loans and guarantees.

Brian O’Donnell and Dr Mary Pat O’Donnell, Gorse Hill, Vico Road, Killiney, Co Dublin, and companies in which they have shareholdings, are alleged by the bank to have extensive additional borrowings of some €800 million with other financial institutions across several jurisdictions.

Mr O’Donnell’s practice of Brian O’Donnell Partners, Merrion Square, Dublin, is among the firms contracted to provide legal advice to the National Assets Management Agency (Nama).

Mr Justice Peter Kelly yesterday granted an application by Paul Gardiner SC, for Bank of Ireland, to transfer to the Commercial Court proceedings for €69.5 million summary judgment against the couple arising from various loans, including a €7.7 million loan to purchase a property at Ailesbury Road, Dublin, and other facilities to refinance property loans with Ulster Bank and Anglo Irish Bank.

The bank claims default for some time of interest payments on various facilities. It also says the couple had failed to advance acceptable proposals to address their indebtedness and that of their companies. Last December, the bank demanded repayment of the facilities and also demanded repayments under various guarantees of the couple.

Mr Justice Kelly yesterday rejected arguments by Maurice Collins SC, for the couple, of inactivity by the bank in relation to default, disentitling the bank to have the case fast-tracked in the Commercial Court.

Mr Collins argued the bank had failed to give the couple a proper opportunity to service and refinance the various loan facilities. It could be argued there was an implied term in loan agreements that the bank would act in good faith and not frustrate his clients to try and get advantage concerning properties over which it had no security, counsel said.

In an affidavit, Mr O’Donnell alleged the bank was trying to pressure him and his wife to sell shares in Redicent Ltd, a property holding company whose only asset was a prime property asset in the UK, Sanctuary Buildings, Westminster, London. The bank had loaned some £26.7 million to Redicent under a junior loan facility, which was not part of these proceedings and not secured on the Sanctuary Buildings property or the shares of Redicent, he said.

Mr O’Donnell added he and his wife have been customers of Bank of Ireland for 34 years.

Mr Gardiner said it seemed Mr O’Donnell was both alleging the bank was putting pressure on him to sell the Sanctuary building and also saying it had blocked the sale. Nothing put forward on behalf of the defendants amounted to a defence to the bank’s claim, he said.

The judge allowed three weeks to the couple to outline on affidavit a defence to the summary judgment application and listed it for hearing on March 3rd, when he will also deal with proceedings in which Bank of Ireland wants some €42 million summary judgment orders against three companies of the couple over the same loans. They are GreyStoke, a company registered in Luxembourg; Vico Swiss Holdings; and Avoca Properties Ltd.

Mr Justice Kelly noted that, apart from the €69.5 million claimed against the couple, a statement of affairs for Vico Capital, of which Mr O’Donnell was chairman, showed borrowings of some €800 million due to other financial institutions. The judge said there seemed to be some confusion about what Vico Capital is. It was described as a private equity firm and a trading name of the couple.

In its statement of affairs, Vico was also said to have assets valued at more than €1 billion but Bank of Ireland has raised issues about the property values on which the assets statement was based.

The judge outlined various dealings between Bank of Ireland and the O’Donnells throughout 2008, 2009 and 2010. He said correspondence indicated the bank was seeking updated property values and information on security for the facilities, and about the ability to service interest payments.

Based on what was before the court, he could not say there was torpor on the part of the bank. He said he would not be justified in refusing to transfer the case.

VICO CAPITAL MULTIMILLION-EURO PROPERTY DEALS

VICO CAPITAL is essentially a trading name for the personal investment vehicle used by commercial lawyer Brian O'Donnell and his wife, Dr Patricia O'Donnell.

They began the business in 1999 with a series of investments in Irish property. The company moved up several gears in March 2005 with the €200 million purchase of Westferry Circus in London's Canary Wharf district.

The deal looked audacious at the time. It was wrapped up in hours to ensure that the buyers benefited from a stamp duty exemption for the area that then chancellor of the exchequer, Gordon Brown, announced would be coming to an end.

Other properties followed, including Stockholm's biggest office block, Fatburen, in 2007 for €285 million, and 2009 Pennsylvania Avenue, on the same street as the White House in Washington DC, in April 2008 for $172.5 million.

In 2006, the O'Donnells bought the Sanctuary building in Westminster, London, home to Britain's department of education – and the property that they claimed in court yesterday that Bank of Ireland is putting pressure on them to sell – for €252 million.

The bank provided Vico with an unsecured £26.7 million towards the building's purchase, but has no security over either the property or Redicent, the O'Donnell-controlled vehicle that owns it.

Mr O'Donnell recently turned down a £163.2 million offer for the property, as he believed this fell far short of its true value.

It is understood that because of various clauses in the loan agreement with Bank of Ireland, the institution would only have recovered £4.5 million if the building had been sold for that price.

Overall, Vico reckons that its properties are worth €1.1 billion, while its debts are €800 million. The properties produce €50 million a year in rent.

O'Donnell is a practising corporate law solicitor and is on a panel of 64 legal advisers to State loans agency, Nama, although a spokesman said the agency had not given him any work.

Before setting up on his own in the 1990s, Mr O'Donnell worked at Dublin firm William Fry, one of the Republic's bigger commercial practices. He rose to the rank of managing partner in the Nineties.

He spotted the growing demand for commercial law specialists in the Republic, whose economy had begun expanding and, in 1999, decided go out on his own. His practice focuses on areas such as merger and acquisitions, corporate law, litigation and tax.

The firm acted for shareholders in Dublin's Mater private hospital on its €385 million sale to Capvest, advised Eurocare on its €80 million healthcare facility in Waterford and also advised BP when it was considering building a power plant in the Republic.

BARRY O'HALLORAN